2019 New Mexico Statutes
Chapter 6 - Public Finances
Article 6 - Local Government Finances
Section 6-6-11 - Yearly expenditures limited to income; Bateman Act.
It is unlawful for any board of county commissioners, municipal governing body or any local school board, for any purpose whatever to become indebted or contract any debts of any kind or nature whatsoever during any current year which, at the end of such current year, is not and cannot then be paid out of the money actually collected and belonging to that current year, and any indebtedness for any current year which is not paid and cannot be paid, as above provided for, is void. Any officer of any county, municipality, school district or local school board, who shall issue any certificate or other form of approval of indebtedness separate from the account filed in the first place or who shall at any time use the fund belonging to any current year for any other purpose than paying the current expenses of that year, or who shall violate any of the provisions of this section, is guilty of a misdemeanor.
History: Laws 1897, ch. 42, § 15; C.L. 1897, § 299; Code 1915, § 1227; C.S. 1929, § 33-4241; 1941 Comp., § 7-607; 1953 Comp., § 11-6-6; Laws 1968, ch. 72, § 7.
ANNOTATIONSCross references. — For budgets of local public bodies, see 6-6-2 to 6-6-6 NMSA 1978.
Compiler's notes. — The Bateman Act, which provided for funding the floating indebtedness of counties, boards of education, municipal corporations and school districts, was enacted by Laws 1897, ch. 42. Only the presently operative portions thereof, §§ 15 to 21 (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978), were retained in the 1915 Code and subsequent compilations.
I. GENERAL CONSIDERATION.
Bateman Act not repealed by later enactments. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) was not repealed by § 1339, 1915 Code (since repealed) relating to tax levies for judgments for current expenses. James v. Board of Comm'rs, 1918-NMSC-106, 24 N.M. 509, 174 P. 1001.
The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) was not repealed by Laws 1915, ch. 12 (since repealed) which fixed salaries for county officers. James v. Board of Comm'rs, 1918-NMSC-106, 24 N.M. 509, 174 P. 1001.
The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978), limiting county expenses to current funds, was not repealed by a statute permitting levy of taxes for judgments for current expenses. Optic Publ'g Co. v. Board of Comm'rs, 1921-NMSC-088, 27 N.M. 371, 202 P. 124.
The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) was not repealed by Acts 1919, ch. 16 (since repealed), providing for the payment of salaries of county officers. Baca v. Board of Comm'rs, 1924-NMSC-073, 30 N.M. 163, 231 P. 637.
Purpose. — The purpose of the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) is to prevent counties and municipalities from contracting debts they are not able to pay. Treloar v. County of Chaves, 2001-NMSC-074, 130 N.M. 794, 32 P.3d 803, cert. denied, 131 N.M. 64, 33 P.3d 284 (2001).
Intent of Bateman Act. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) was designed to require municipalities to live within their annual incomes. City of Hobbs v. State ex rel. Reynolds, 1970-NMSC-133, 82 N.M. 102, 476 P.2d 500.
Policy adopted by legislature. — The legislature adopted as a policy the plan that counties and other municipal subdivisions should be compelled to limit their expenses to their respective incomes, and that their debts insofar as they exceeded such income should be void, except for the purposes of entitling the creditor to his pro rata of moneys coming in from deferred taxes. Johnston v. Board of Cnty. Comm'rs, 1904-NMSC-018, 12 N.M. 237, 78 P. 43.
This statute does not exempt villages. Campbell v. Village of Green Tree, 1955-NMSC-030, 59 N.M. 255, 282 P.2d 1101.
II. APPLICABILITY.
Bateman Act applicable to debts for necessities. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) applies to debts created for necessities such as water and lights for use at a courthouse or others which may be arbitrarily placed against a county, as well as those of voluntary creation. Santa Fe Water & Light Co. v. Santa Fe Cnty., 1924-NMSC-028, 29 N.M. 538, 224 P. 402.
County indebtedness for publication of delinquent tax list. — Indebtedness incurred by county for publication of delinquent tax list is within the provisions and limitations of the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978). Sena v. Board of Comm'rs, 1921-NMSC-094, 27 N.M. 461, 202 P. 984.
Inapplicable to indebtedness to state. — The Bateman Act (Sections 6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) does not apply to indebtedness to the state. State ex rel. Wilson v. Board of Cnty. Comm'rs, 1957-NMSC-005, 62 N.M. 137, 306 P.2d 259; State v. Board of Cnty. Comm'rs, 1928-NMSC-026, 33 N.M. 340, 267 P. 72.
Contracts for services of attorney. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) does not apply to contracts for services of an attorney. An attorney rendering services is entitled to payment from taxes collected that year, but not used, and in the next tax levy, if necessary. Neal v. Board of Educ., 1935-NMSC-093, 40 N.M. 13, 52 P.2d 614.
Bateman Act not applicable to special funds. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) has no application to special funds created for special purposes. San Juan Water Comm'n v. Taxpayers & Water Users of San Juan Cnty., 1993-NMSC-050, 116 N.M. 106, 860 P.2d 748.
Special funds for special services. — If a special fund for a special purpose is created, the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) is not applicable. City of Hobbs v. State ex rel. Reynolds, 1970-NMSC-133, 82 N.M. 102, 476 P.2d 500.
III. EXPENDITURES AND INDEBTEDNESS.
Special fund available to pay contract. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978)was not applicable to defeat a physician's claim for monies due following the termination of his employment with a county hospital since the county's setting aside several million dollars for contingencies from the sale of the hospital created a special fund from which the claim could be paid. Treloar v. County of Chaves, 2001-NMCA-074, 130 N.M. 794, 32 P.3d 803, cert. denied, 131 N.M. 64, 33 P.3d 284.
Joint powers agreement to fund water acquisition. — A joint powers agreement entered in to with the U.S. bureau of reclamation pursuant to the Joint Powers Agreement Act was intended to create a specific general fund funded by a specific mill levy to pay for the acquisition of water rights and thus did not violate the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978). San Juan Water Comm'n v. Taxpayers & Water Users of San Juan Cnty., 1993-NMSC-050, 116 N.M. 106, 860 P.2d 748.
Terminated physician's claim against county hospital. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) did not defeat a physician's claim for monies allegedly due following the involuntary termination of his employment with a county hospital since there was no indication that, if the hospital had continued as a county hospital, it would not have been able to pay the severance payments out of the funds it collected in the year the physician's services were terminated. Treloar v. County of Chaves, 2001-NMCA-074,130 N.M. 794, 32 P.3d 803, cert. denied, 131 N.M. 64, 33 P.3d 284.
Bateman Act does not excuse payment of debts which could have been paid. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) makes void debts which are not and cannot be paid, but where the debt was not paid, although it could have been paid, the statute is not applicable. Cathey v. City of Hobbs, 1973-NMSC-042, 85 N.M. 1, 508 P.2d 1298.
Payments for water supply financed by water charges sufficient to meet payments not general obligations. — Where a municipality enacts an ordinance to obtain, supplement and pay for its water supply and to adopt and enforce water charges sufficient to meet the required payments, such payments are not general obligations or indebtednesses within the meaning of any constitutional or statutory provisions. City of Hobbs v. State ex rel. Reynolds, 1970-NMSC-133, 82 N.M. 102, 476 P.2d 500.
Materials for school district are direct charge item for which only that district is liable. — Obligation to pay for roofing material sold to county board of education as agent for a particular school district is a direct charge item for which only the district for which it is allocated is liable, and even then is recoverable only in the event that current revenues sufficient in amount to pay the bill are collected. McAtee v. Gutierrez, 1944-NMSC-001, 48 N.M. 100, 146 P.2d 315.
Limitation on funds from which judgments may be paid. — A judgment rendered in one year for fees, salaries or perquisites of an officer for a preceding year cannot be paid out of any funds except the taxes collected for the current year in which the services are rendered or the fees and perquisites become due. Territory ex rel. Adair v. Beall, 1904-NMSC-007, 12 N.M. 131, 75 P. 38.
Irregular issuance of certificates of indebtedness. — An irregular issue of certificates of indebtedness far exceeding anticipated proceeds of tax levy for the year does not show conscious wrongdoing preventing certificate holders from proceeding against the buildings for the erection of which the certificates were issued. Shaw v. Board of Educ., 1934-NMSC-031, 38 N.M. 298, 31 P.2d 993.
City indebtedness for swimming pool construction over two-year period. — Indebtedness incurred for swimming pool construction over two-year period is void by reason of the provisions of this section. McMurtry v. City of Raton, 1959-NMSC-096, 66 N.M. 277, 347 P.2d 168.
City employees may not recover back wages under invalid minimum wage ordinance. — A city has no authority to delegate to the state labor commissioner power to establish minimum wages for city employees, and city employees may not recover wages for past years that would have been payable under such an invalid standard. Adams v. City of Albuquerque, 1957-NMSC-006, 62 N.M. 208, 307 P.2d 792.
IV. PLEADING AND PRACTICE.
Answer. — In action for mandamus to compel levy of tax to satisfy judgment, the respondents, relying on the alleged fact that the town's certificates of indebtedness were issued for current indebtedness, should have raised the issue by answer, instead of demurring to alternative writ of mandamus. State ex rel. Chesher v. Beall, 1937-NMSC-079, 41 N.M. 652, 73 P.2d 329.
Availability of mandamus. — If previous special levies produced a sufficient amount to satisfy a judgment against a town, and portions thereof were unlawfully diverted to other purposes, the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) would not bar application for mandamus to compel a new levy. State ex rel. Chesher v. Beall, 1937-NMSC-079, 41 N.M. 652, 73 P.2d 329.
Constitutional questions. — In a mandamus proceeding to compel levy of a tax to pay a judgment, in absence of evidence to show that combined tax rate for state and local purposes would exceed the constitutional limitation, no constitutional question is presented, for neither the statutory limitation nor the prohibitions of the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) will shield the county from a forced levy to satisfy a tort judgment, and the holder of such judgment is entitled to mandamus against the state tax commission to approve levy of taxes for its payment. State ex rel. Martin v. Harris, 1941-NMSC-032, 45 N.M. 335, 115 P.2d 80.
Allegation of violation of Bateman Act held premature. — Prior to approval by the state engineer of a municipality's applications to appropriate underground water, it is premature to allege that a contract involving a municipal water supply violates the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978). City of Hobbs v. State ex rel. Reynolds, 1970-NMSC-133, 82 N.M. 102, 476 P.2d 500.
Where a municipality files applications with the state engineer to appropriate underground water, only if such applications are approved will any type of purchase financing be required and only subsequent to such approval could the amount of the obligation be ascertainable, in which event such financing might be accomplished by means which would satisfy the requisites of either 3-27-5 NMSA 1978 or this section. City of Hobbs v. State ex rel. Reynolds, 1970-NMSC-133, 82 N.M. 102, 476 P.2d 500.
Exhaustion of current funds is defense. — This section does not permit the rendition of a judgment against a county for current expenses where the complaint shows on its face that the claim on which judgment is sought has been allowed by the county commissioners, and the payment denied or refused for want of funds. Optic Publ'g Co. v. Board of Comm'rs, 1921-NMSC-088, 27 N.M. 371, 202 P. 124.
Insufficient funds defense. — No judgment can be rendered against a county on a claim for current indebtedness arising out of the publication of the delinquent tax list where such claim has been presented and allowed, and payment thereon refused or denied on account of insufficient funds with which to pay it. Sena v. Board of Comm'rs, 1921-NMSC-094, 27 N.M. 461, 202 P. 984.
Insufficient funds defense not applicable where due to unlawful diversion of funds. — A county creditor whose claim cannot be paid because of exhaustion of appropriate fund of the current year must bear the loss, except for his right to participate with other creditors in subsequent collections of revenue belonging to that year; but such exhaustion is no defense if it was due to an unlawful diversion. Las Vegas Indep. Publ'g Co. v. Board of Cnty. Comm'rs, 1931-NMSC-033, 35 N.M. 486, 1 P.2d 564.
Bateman Act not defense where funds from special tax levy diverted to other purposes. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) is no defense to an action to recover judgment on certificates of indebtedness issued by a county in anticipation of the collection of a special tax levy, and payable from the proceeds of that levy, where the levy produced sufficient funds to pay the certificates, but the funds were diverted to other purposes. Capital City Bank v. Board of Comm'rs, 1921-NMSC-112, 27 N.M. 541, 203 P. 535.
Violation of Bateman Act must be pleaded and proved. — A violation of the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) in the employment of teachers for a municipal school is a defensive matter which must be pleaded and proved in an action for breach of contract for discharge of a teacher. Landers v. Board of Educ., 1941-NMSC-039, 45 N.M. 446, 116 P.2d 690.
Pleading affirmative defense of violation of act. — The Bateman Act (Sections 6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) is an affirmative defense which must be pleaded and proven with the burden upon the party asserting it to so prove its application. Where city had not shown that required funds were unavailable at the time that resolution in question was duly passed by the city council to pay for the contractual services of the plaintiff, the act was not applicable. National Civil Serv. League v. City of Santa Fe, 370 F. Supp. 1128 (D.N.M. 1973).
Burden of proof of applicability of Act. — A party relying upon the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) has the burden of pleading and proving its application. McAtee v. Gutierrez, 1944-NMSC-001, 48 N.M. 100, 146 P.2d 315.
Development agreements. — A home rule municipality has the authority to enter into a contract with a private developer in order to facilitate the construction of retail business establishments, which contract provides for the reimbursement or forgiveness of impact fees, so long as the reimbursement comes from a special fund dedicated for that special purpose. 2002 Op. Att'y Gen. No. 02-02.
Contract for salary during second year of contract term. — A contract between a local school board and a school administrator may provide for a specific salary during the second year of the contract term without violating the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) but only if the board commits funds from the fiscal year of contracting to pay the salaries for both years and funds from any other fiscal year are not necessary to pay the salaries. 1988 Op. Att'y Gen. No. 88-55.
Contract paying monthly sum for 25 years. — A contract that would pay a contractor a certain sum each month for the next 25 years for privately operating a prison violates the Bateman Act, (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978), in that it presently obligates unconditional future payments of money for future services to be rendered. 1983 Op. Att'y Gen. No. 83-05.
Contracts for school yearbooks which extend beyond current year. — Since the money for school yearbooks is not collected except for the current year, it is a violation of the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) for a school district to continue with contracts for their publication which extend beyond the current year. 1969 Op. Att'y Gen. No. 69-17.
Long-term leases. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) does not prohibit a school district from entering into long-term leases. 1968 Op. Att'y Gen. No. 68-23.
Contracts, as well as actual indebtedness, are covered by this section. — The prohibition of this section relates not only to becoming indebted, but also to the contracting of debts which are not or cannot be paid out of money actually collected and belonging to the current year. 1965 Op. Att'y Gen. No. 65-53.
Collections not payable on indebtedness of another year. A municipal corporation may not pay from funds of the current fiscal year several old accounts payable, even though current funds are sufficient to pay such obligations. 1958 Op. Att'y Gen. No. 58-41.
Date of abandonment of project determines year in which obligation payable. — Where a contract for engineering was made in 1954 and formal abandonment of the project was made in 1956, the town could make payment out of current funds for these services, as the act of abandonment created the obligation to pay for the services under the terms of the contract. 1956 Op. Att'y Gen. No. 56-6535.
Vacation time for county employees cannot be accumulated beyond current year and be paid for out of the succeeding year's budget. County officers and employees are entitled to a lawful vacation period, but if they waive the same and elect to work during their vacation period, they may not be paid an additional amount for such work. 1955 Op. Att'y Gen. No. 55-6121.
Indebtedness to federal government. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) does not apply to an indebtedness of a municipality to the federal government. 1956 Op. Att'y Gen. No. 56-6483.
Contract prohibited if not payable in current year. — This section prohibits a county board of education from entering into a contract which cannot be paid out of the money actually collected and belonging to that current year. 1956 Op. Att'y Gen. No. 56-6443.
Later collections for current year may be distributed pro rata among creditors. — County obligations must be paid from revenues available for year or be null and void except that moneys collected later belonging to such year may be distributed pro rata among creditors. 1937 Op. Att'y Gen. No. 37-1705.
Reduction of salaries of deputy county officers. — The board of county commissioners of a second class county has no authority to reduce salaries of deputy county officers below amount provided by law, especially where full amount of such salaries for year was duly budgeted, although all county officers have to bear pro rata reduction in order to limit expenditures of year to its income. 1937 Op. Att'y Gen. No. 37-1649.
Failure by county commission to levy tax to pay interest on school district bonds. — A school district cannot borrow money to pay interest on its bonds, which were issued validly, when county commissioners fail to levy tax for such purpose, and one district cannot loan money to another for such purpose out of moneys in its sinking fund. 1931 Op. Att'y Gen. No. 31-81.
Collections for particular current year may be applied on indebtedness for that year, regardless of when such collections are made. 1932 Op. Att'y Gen. No. 32-383.
Collections not payable on indebtedness of another year. — Collections made during any current year, for such year, cannot be applied on indebtedness for another year. 1932 Op. Att'y Gen. No. 32-383.
County board of education may borrow money to pay warrants of school teachers to avoid the necessity of discounting the warrants. 1921 Op. Att'y Gen. No. 21-2785.
School expenditures. — The Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978) applies to school expenditures as well as to all others. 1921 Op. Att'y Gen. No. 21-3186.
Warrants limited by tax levy and not by amount of money actually collected. — A county board of education may lawfully issue warrants to the amount of the levy for the year in which said warrants are issued, and they are not limited to the amount of money actually collected. 1919 Op. Att'y Gen. No. 19-2430.
Money need not be on hand when warrants issued if warrants limited to current year funds. — School district warrants may be approved, even though the funds may not be on hand to meet them, provided the warrants so drawn will not run beyond what can be paid from the funds of the current year. 1915 Op. Att'y Gen. No. 15-1505.
Floating indebtedness prohibited. — There can be no outstanding floating indebtedness in excess of current revenue collections for the same year under the Bateman Act (6-6-11 and 6-6-13 to 6-6-18 NMSA 1978). 1913 Op. Att'y Gen. No. 13-1137.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 56 Am. Jur. 2d Municipal Corporations, Counties, and Other Political Subdivisions § 594; 68 Am. Jur. 2d Schools § 101.
Power of municipality or other governmental body to issue refunding bonds to retire obligation in respect of which the creation and maintenance of a sinking fund by taxation is required, 157 A.L.R. 794.
Bond issue in excess of amount permitted by law, validity of within authorized debt, tax or voted limit, 175 A.L.R. 823.
20 C.J.S. Counties § 188; 64 C.J.S. Municipal Corporations § 1846; 79 C.J.S. Schools and School Districts § 325; 87 C.J.S. Towns § 113.
